Trickle Downers

The Prospect's ongoing exposé of the folly, dysfunctions, and sheer idiocy of feed-the-rich economic policies.

Tax Cuts for the rich. Deregulation for the powerful. Wage suppression for everyone else. These are the tenets of trickle-down economics, the conservatives’ age-old strategy for advantaging the interests of the rich and powerful over those of the middle class and poor. The articles in Trickle-Downers are devoted, first, to exposing and refuting these lies, but equally, to reminding Americans that these claims aren’t made because they are true. Rather, they are made because they are the most effective way elites have found to bully, confuse and intimidate middle- and working-class voters. Trickle-down claims are not real economics. They are negotiating strategies. Here at the Prospect, we hope to help you win that negotiation.

(Photo: AP/Seth Wenig) Kudlow speaks at the New York State Republican Convention in 2014 trickle-downers.jpg I f we needed a clearer signal that Donald Trump’s administration will go all in for amped-up trickle-down economics—that is, tax cuts for the rich, deregulation for the corporations, and wage suppression for everyone else—consider that the president-elect is likely to tap Larry Kudlow to chair his White House Council of Economic Advisers. For those who aren’t familiar with him, Kudlow is a prolific cable news commentator who has a stellar reputation for being wrong—a lot. Like, a lot a lot . Given that he has no formal education in economics, Kudlow also neatly fits Trump’s preference for putting “unconventional” people (i.e., he sees them frequently on cable news) to top White House posts. As David Dayen aptly puts it in The Nation , “Kudlow isn’t an economist, but he plays one on TV.” To put a sharper point on it, he plays a trickle-down economist on TV. As a ubiquitous...

In 2017, Portland, Oregon, will become the first city to impose a surtax on companies with CEOs who make more than 100 times their workers’ median pay—an idea that was floated by Prospect executive editor Harold Meyerson two years ago.

“If congressional liberals want to diminish economic inequality, they should also promote legislation that would link corporate tax rates to the ratio between CEO pay and the firm’s median pay,” Meyerson wrote in 2014. “They [CEOs and their boards] would … have a self-interest in raising their workers’ wages.”

The Portland rule, which Councilmember and City Commissioner Steve Novick told Meyerson was inspired by Meyerson’s writing, requires companies to pay an additional 10 percent in taxes if their CEO pay is 100 times their median worker’s pay, and an additional 25 percent if the ratio is more than 250 to 1. Novick told Meyerson that there were 540 such corporations doing business in Portland—five of which are based there.

A similar bill was proposed in California in 2014, but died on the state Senate floor. The 2010 Dodd-Frank financial-reform law required the Securities and Exchange Commission to publish U.S. corporations’ CEO-to-worker pay ratios.

“When I first read about the idea of applying a higher tax rate to companies with extreme ratios of CEO pay to typical worker pay, I thought it was a fascinating idea,” Novick told The New York Times after the measure passed on December 7. In The Guardian, economist Branko Milanovic was also quoted praising the idea, saying “it seems [to be] the first tax that targets inequality as such. … It treats inequality as having a negative externality like taxing carbon emissions.”

(Photo: Sipa USA via AP) Airport workers on strike hold a protest seeking a $15 minimum wage at O'Hare International Airport in Chicago on November 29, 2016. trickle-downers.jpg A ll happy economies may be alike (there have been so few it’s hard to generalize), but each unhappy economy afflicts its victims differently. So it is for America’s working class, in which both minority and white workers suffer, but in different ways. Last week, Eduardo Porter’s New York Times column propounded the notion, supported by data from the Economic Cycle Research Institute, that despite the recovery of the past half-decade, whites in aggregate still had lost jobs, while minorities had gained them. When measured against the pre-recession employment high point of November 2007, the number of employed whites, Porter wrote, is now more than 700,000 below that apogee, while the number of employed Hispanics has increased by roughly three million, Asian Americans by 1.5 million, and blacks by one million...

Photo: AP/Cliff Owen House Speaker Paul Ryan during a news conference on Capitol Hill earlier this month. A s Congress prepares to end its lame-duck session, Republican House Speaker Paul Ryan races to grease the tracks for his trickle-down tax plan. His partner in this latest GOP shell game is Senate Majority Leader Mitch McConnell, who told reporters at a Capitol Hill press conference Monday that after Republicans finish gutting Obamacare (their first target), they intend to use a second, filibuster-proof, budget reconciliation process to ram through comprehensive tax reform. The speaker would have you believe that his reform plan merely simplifies the tax code by shaving the number of tax brackets from the current seven—“their [the Democrats’] way”—down to just three—a #BetterWay—the average taxpayer will save big bucks. He recently tweeted: The U.S. tax code is too complicated. ← Retweet if you agree. #BetterWay pic.twitter.com/Do9qmHskzd — Paul Ryan (@SpeakerRyan) December 11,...

Fight for 15 supporters gather before a protest in Cleveland over the summer. (Photo: Raise Up Cleveland/Facebook) trickle-downers.jpg I n its lame-duck rush to push through a controversial legislative package, the Republican-controlled Ohio Legislature made headlines by passing the “ heartbeat bill ,” an oppressive—and likely unconstitutional—anti-abortion measure that, if signed by Republican Governor John Kasich, would be the most restrictive law in the country. But there was another harsh measure in the mix that flew under the radar: a measure that would force Ohio localities to comply with state minimum-wage regulations that top out at $8.10 an hour. The legislation aims to block Cleveland, one of Ohio’s largest and poorest cities, from unilaterally boosting wages for its low-wage workers. According to U.S. census data , 35,000 Clevelanders work full-time for less than $15 an hour, and 50 percent of those workers are black. After the Cleveland City Council rejected a both a Fight...